Prestigious transactions and perceptions of value

Date of publication : 23 十月 2018

If the sale of Clos du Tart in 2017 for 40 million euros per hectare received considerable attention in the press, the transaction announced in Bordeaux in September should create an eruption of reactions in the heart of the Pomerol appellation. According to the press, the Moueix family, owners of Château Pétrus, have sold a 20% stake in their estate based on an estimated value of one billion euros for 11.5 hectares, or 87 million euros per hectare.

Valuation

Such a valuation clearly begs questions regarding the method of calculation used to arrive at such a figure, but also raises issues on a parallel theme: Take for example the statistics released by the SAFER on the price of land in 2017. According to their study, one hectare of vineyard in AOP Corbières is worth an average of 8 500€ per hectare. AOP Corbières spreads from Narbonne to Carcassonne over a surface of approximately 10 000 hectares. By this calculation, the entire Corbières appellation would be worth around 85 million euros, or, in other terms, the same value as one hectare of Château Pétrus.

Transactions of prestigious vineyard estates: the perceived value plays a crucial role

Can it really be possible that one hectare of vines in Pomerol has the same worth as the 10 000 hectares that constitute an entire appellation? In truth, the calculation of Château Petrus’ worth is down to its perceived value in the eyes of the buyer at that moment. This value is not necessarily financial and has no direct link to the economic value or any production costs. On the other hand, in the luxury goods market, the awareness of a perceived value is of paramount importance in the process of price setting.

In the case of transactions of prestigious vineyard estates, perceived value plays a crucial role and, given the upward price trend in the most sought-after appellations and international brands, we can expect these staggering prices to continue to head skyward.